Italy’s elections aftermath: Pyrrhus and Machiavelli

The frenzied noise of champagne bottles being uncorked by the alleged winners of the 2018 Italian elections is already a distant memory.
The 5 Star Movement is the largest single political party (32%) while the Center-Right is the largest coalition (37%). Incidentally, the League’s leader, Matteo Salvini, obtained more votes than Berlusconi’s party. Both, however, fall short of the 40% required to form a government.

There is no winner. There is, however, one big loser: the Democrats who have led the government for the last 5 years (below 20%).

Almost 33 million Italians (73%) went to the polls, the country is split in two: a Center-Right North opposed to a 5-Star-Movement South.

There are two kingmakers at this stage: the President of the Italian Republic and the fear of newly-elected MPs’ regarding possible new elections.

Following the hearings with the representatives of the political parties, the President will appoint a leader – the President of the Council of Ministers (PM)– whose task it will be to achieve an upper and lower house majority. If successful, the PM will, then, propose a list of Ministers for the President’s approval. The President of the Republic might well refuse some candidatures. The last step is the formal vote of confidence by the parliament.

Speculation abounds on which leader will be tasked with finding a majority. There is no specific provision. Everything will depend upon the hearings. The natural candidates are, theoretically, either the leader of the 5-Star-Movement, 31-year-old Luigi Di Maio, or the leader of the League, 44-year-old Matteo Salvini. Before new elections are called, the President of the Republic is obliged to find a majority within the newly appointed Parliament. Options might include personalities external to the political arena.

The President will take his time, which, in turn, will calm the emotions that still run high. MPs will realize, after much chest pounding on the purity of their respective ideals and their promises of “no compromise” with the enemy/opponent, that, in fact, politics remains the art of the compromise.

Many new MPs, in particular those elected in the ranks of the 5 Star Movement, have never filed a tax return (having had neither job nor income). Each will receive a paycheck of approximately US$ 15,000 per month plus allowances. “It’s the economy, stupid!” not so much a paraphrase.

The markets are doing fine despite being anxious about President Trump’s tariff strategy. No doomsday for Italy. The Milan Ftse Mib gained 1.22% at the end of March 7, closing slightly short of 22,500 points.

MPs will become more Machiavellian than they had anticipated. All would agree, in private conversations, that it has been, so far, a Pyrrhic Victory.